Electronics Corporation of India Ltd. Hyderabad –

PART I: PMS & BELL CURVE APPROACH PART-II: REMUNERATION COMMITTEE & RECOMMENDATIONS ON PRP PART-III: CALCULATION OF PRP 2

PERFORMANCE MANAGEMENT SYSTEM SALIENT FEATURES Dr. A.N. Chakravarthi, Senior HR Expert was engaged for designing the New Performance Management System for ECIL. After due deliberations with employees at all the levels in the Company including Workers’ Union and Officers’ Association, the new PMS was introduced from the year onwards. Approval of the Board was obtained and PMS implementation was initiated. 3

OBJECTIVES OF PMS: FOCUS IS ON GOAL SETTING AND CONTRIBUTION TO BE MADE BY INDIVIDUAL EXECUTIVES BASED ON AGREEMENT WHICH IS DEVELOPED THROUGH CONSULTATION BETWEEN APPRAISEE AND APPRAISER PROVIDE OPPORTUNITIES FOR IDENTIFYING THE DEVELOPMENT NEEDS FORM THE BASIS FOR THE AWARD OF PERFORMANCE RELATED PAY PERFORMANCE MANAGEMENT SYSTEM SALIENT FEATURES 4

PERFORMANCE APPRAISAL FORMATS PA - 4: FOR AGM(EG-8) AND SDGM(EG-7) LEVEL EXECUTIVES PA – 3: FOR DGM(EG-6) TO ATO(EG-1) LEVEL PA – 2: FOR NON-TECHNICAL/ ADMINISTRATIVE/ SECRETARIAL STAFF / OTHERS PA – 1: FOR ARTISAN, TRADESMAN AND UNSKILLED WORKERS 5

FRAME WORK for Executives 1.PERFORMANCE PLAN AND REVIEW 2.PROFESSIONAL DEVELOPMENT PLAN 3.PERFORMANCE APPRAISAL RECORD 6

BELL CURVE APPROACH A.GRADING: 1.EXCELLENT: > 9 – 10 2.VERY GOOD: > 7.5 – 9 3.GOOD:> 6 – SATISFACTORY: 5 – 6 5.POOR:< 5 B. Not more than 10% Executives to be in the highest/lowest grading (Excellent / Poor) 7

To ensure “Bell Curve” the following additions have been made in the PEN PICTURE COLUMN of all APAR Forms: Writing the ‘pen picture’ for employees is mandatory. The highest / lowest ratings (9 to 10 and <5 ratings) are to be specifically qualified by explanation in ‘pen picture’. A difference of more than 2 points between Reporting and Reviewing Officer has to be qualified and explained. HoDs have to do moderation of ratings in consultation with Reporting & Reviewing Officers in order to ensure “Bell – Curve”. 8

REMUNERATION COMMITTEE Remuneration Committee first constituted on The members are: Dr M J Zarabi Chairman (Non-official Director) Shri U Visnhumurthy Member (Director – Finance) Shri Shiv Kumar Nori Member (GM – Finance) Shri A A Hussain Member-Secretary (Head, PG) 9

REMUNERATION COMMITTEE Re-constituted on The members are: Shri Umesh Chandra – Non-functional Director Shri J.K.Ghai - Non-functional Director Dr. Chandrasekhar was included in March, 2011 and made Chairman. Again re-constituted on consisting of all non- functional Directors. The members are: Shri V V R SastryChairman Shri Umesh Chandra Member Dr.C B S VenkataramanaMember Again re-constituted as under: Shri V.V.R.SastryChairman Shri ChakrapaniMember Dr.C.B.S.VenkataramanaMember 10

RECOMMENDATIONS OF REMUNERATION COMMITTEE a)To pay 5% of PBT as PRP in line with recommendations of OM. b) To allow the management to either pay PRP from 01 April 2009 i.e. 3% from profits of and 2% from incremental profits of over OR Pay incentive for and PRP from , subject to approval of DPE. c)In case PRP is paid, to seek a waiver from DPE of implementing PRP on existing ACR format grading for and on the new PMS for d)Based on OM no other incentive would be admissible to Executives, once PRP is paid. The above recommendations are approved by the Board. 11

PROFIT BEFORE TAX AND THE NUMBER OF EXECUTIVES ELIGIBLE YEARPBT (Rs. In lakhs) NO. OF EXECUTIVES PRP being paid from onwards (will be paid by Dec. 2012) 12

CALCULATION OF PRP for The MOU Rating for is Good, thus MOU rating factor is 0.6 The PBT for the year is Rs.2236 Lakhs. The amount available under Part A, ie., 3% of PBT is Rs lakhs The amount available under Part B i.e., 2% of incremental profit over the year is nil, as there is no incremental profit. 13

CALCULATION OF PRP for FORMULA: PRP PAYABLE = 0.6(AXBXCXDXE1)+0.4(AXBXCXDXE2) A= Annual Basic Paid to the individual B= Rating of MoU performance of the Company for the year C= Grade Factor D= Individual Performance Rating Factor E1= Payout factor (i.e. ratio of amount available to amount required) for component of current year PBT: E2= Payout factor (i.e. ratio of available to amount required) for the component of increase in profit over the previous year 14

Thank you 15